• Michali Henig

Kurzarbeit (short-time work) during COVID-19: important facts for employees

Updated: Aug 26, 2020

Kurzarbeitergeld is an existing device in Germany, which is meant to protect employees from getting fired through a temporary crisis that their companies are experiencing. In order to be able to get this benefit, the company must prove that they are suffering from a lack of contracts/ clients/ projects/ work, which is of temporary nature and which causes a decrease in the amount of work that some/ all employees have to do. In simple words: it means that your employer does not have enough work for you or your colleages at the moment.

In this case, in order to avoid termination in cases where termination does not make any sense because the employees will be needed soon, short-time work can be decided upon.

The device of short-time work was put into practice very fast during the Corona-crisis, since the emergency we are experiencing meets the requirements. During March 2020 the device of short time work (Kurzarbeit) was also renewed, in order to make the procedure and payments more friendly towards companies and employers.

The first step is that your company needs to determine that there is now less work (Arbeitsausfall). According to the new corona-crisis regulations, the company can apply for short-time work if a minimum of 10% of employees are experiencing min. 10% less work (Arbeitsausfall).

At this point, the employees - or employee union (Betriebsrat), must agree to the short-time work. So, if your company has an employee union, a collective decision will be made by them, which will effect you (as it is with organized labour). If your company does not have an employee union, individual agreements must be made with the employees. Basically, those agreements are your consent to short-time work: without going into details, according to them, your position-percent can be changed according to the circumstances.

It is super important to know that you cannot receive short-time-work benefits if they refuse to sign the agreement. So, if you choose to refuse, you will probably be fired immediately.

Another very important requirement is: since the short-time work benefit is given to employees who are supposed to return to their normal work routine after the crisis, you must have a valid employment contract in order to receive it. So, if you resigned or were terminated, you will not receive any short-time-work benefits. Of course, you should still get your full salary during the notice period.

Now, your position-percents have to be determined. You can either not work at all (0%), or work part time (for example: 50%).

If you do not work at all, you should expect to receive 60% of your nets salary. In case that you have children, you should receive 67% of your salary.

Starting the 4th month of short time work, the percentage will increase to 70% for employees who do not have children and to 77% to employees who do have children. Starting the 7th month of short time work, the percentage will increase again, this time to 80% for employees without children and to 87% to employees with children.

If you work part time, you should expect to receive your part-time salary plus a relative part of the difference between part time and full time (or, if you may, between your reduced-work-agreement and your "normal" work conditions): for example: 50% salary plus another 30% short time work benefit (Kurzarbeitergeld). In this case, of course, you will have to work 50%.

You can calculate your new salary throughout the crisis using online calculators, for example this one.

In case you were wondering how this benefit will be paid to you, the answer is simple: through your salary: your employer will pay you directly and get refunded by the government (by the Federal Employment Agency / Bundesagentur für Arbeit, to be accurate).

Is there an income limit?

Yes, of course. Since short-time work benefits are paid by the state unemployment insurance, they are only paid according to social security payment ceilings. In simple terms, the max. amount of short-time work benefits you can receive is between 1.922,22 and 2.891,65, depending on your "normal" salary, along with your tax class and parenthood. For further information, please check out the official short-time work payment table.

Any employee who pays social contributions. Short-time work benefit (Kurzarbeitergeld) is being paid by the unemployment insurance. This makes a simple condition: if you pay into the public unemployment insurance via your salary - you can get it.

In simple words: most employees will be able to receive this benefit. The ones who are excluded are: people who work on a minijob basis (450 Euros per month, no health insurance and sometimes - no social contributions), working students and (under some limitations) Azubis (people in professional training). Managing directors (Geschäftsführer) and owners (Gesellschafter) could receive this benefit if they are paying into the unemployment insurance from their salary (meaning, if their employment with the company is social contributions obligatory - or in German: sozialversicherungspflichtig) - this depends upon their involvement and investment in the company. Please note, that if you are a managing director who only recently started paying social contributions in order to be able to receive short time work benefits - your application will probably get rejected.

If your employment contract allows you, and as long as you are not working for a competitor - it should be fine. Please note that additional income may be deducted from your short time work benefits.

As part of the new regulations made on short time work benefits for the time of corona crisis, it was also determined that if you take a side job doing something which is needed throughout the crisis (for example: working at the supermarket or helping out at the hospital), your additional income will be deducted from your short time work benefits.

Theoretically, if you have 0% position, and receive only short time work benefits, you are considered as a job seeker by the Federal Employment Agency (Bundesagentur für Arbeit). In that case, it could be that they will ask to talk to you (on normal days they would call you in for meetings, but I assume it will not happen nowadays), or send you job offers which are suitable to your profile - for which you will have to apply.

We assume that they will not be super active in trying to find another job for you, but it still could happen, since it is their job to try find jobs for people who do not currently work.

Yes and no: on the short run, the short-time work benefits, such as other income-replacement benefits, are not considered as taxable income.

However, similarly to other income-replacement benefits (such as unemployment benefits), the short-time work benefits add up to your annual income and must be filed on your yearly tax declaration (Steuererklärung) together with your other means of income. This increases the amount of taxes you will have to pay at the end of the year.

Your employer needs to apply for short-time work benefits on a monthly basis. This means, that your company could theoretically make decisions regarding short-time work on a monthly basis, depending on the needs of the company.

Of course, the probability of you going in and out of short-time work during the corona-crisis is low, since many companies cannot legally operate right during the crisis out of health reasons (for example, in the fields of gastronomy or tourism). But theoretically, yes, you can go in and out from short-time work, according to your employer´s needs.

According to the law, employers need to use all other options for compensating employees before going into short-time work. This means, that vacation days from last year must be first claimed/ receiveed, along with vacation days that you have collected via overtime. Only after those means were used, you could receive short-time work benefits.

As long as you are able to work (so, before the end of your pregnancy, and assuming that the doctor/ health ministry did not issue an occupational prohibition (Beschäftigungsverbot), you can get short-time work benefits, like all other employees.

At the end of your pregnancy, when you go into motherhood-protection (Mutterschutz), you will not receive short time work anymore, but rather motherhood protection benefits (Mutterschutzgeld).

As for parental leave: the latter is calculated based on your taxable income in the 12 months before your child was born. Like other salary replacement benefits, short time work benefits will not "count" as an income - which might cause a situation in which you will receive smaller parental leave benefits (Elterngeld).

This depends on the timing: if you were first put on short-time work benefits and then became sick - you will continue to get the short-time work benefits throughout the first 6 weeks of your disease.

However, if you were sick before your employer announced short-time work benefits, you cannot receive this benefit, and will have to continue getting paid "normally" throughout the first 6 weeks of your disease.

In case that you will be sick for longer than 6 weeks, you will start receiving sick-benefits (Krankengeld) from your public health insurance provider (Krankenkasse).

This guide was prepared for you with much care and attention, trying to provide you with information that can help clear up your situation. I am doing my best in order to prepare good, high-quality guides. If you have any notes or corrections, please feel free to reach out to me and let me know!

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